The deficit was reduced to a level below the targeted 4.8% despite a shortfall of Rs 48,000 crore in the Centre's tax revenue and a 45% shortfall in non-debt capital receipts at Rs 36,643 crore.

Although the revenue deficit target of 3.3% of the GDP is met, the effective revenue deficit, difference between revenue deficit and grants for creation of capital assets, has widened to 2.2% as against the budgeted 1.8%.

Assuming a 13.4% nominal GDP growth for FY15, Chidambaram projected the fiscal deficit for the year at 4.1%, better than 4.2% envisaged in a fiscal consolidation road map.

His tax projections — 18% growth despite a slippage of Rs 48,000 crore this year — clearly looked ambitious. Unless the next government manages to realise the huge tax demands on MNCs like Vodafone, the tax collection target would be difficult to meet. The tax department 's increased efficiency in boosting collections could help revenue, but it is unlikely to be enough to meet collection targets.

Non-tax revenues, that includes dividend and profits from PSUs and spectrum proceeds, are estimated to fall by 6.5% to Rs 1.8 lakh crore in 2014-15. Even though the disinvestment target for this year has been missed by a wide margin, Chidambaram expects a 120% rise in the receipts from PSU stake sales at Rs 56,925 crore for next year, compared to the revised estimate of Rs 25,841 crore for this year. To achieve this, the government would need to weather a political storm and start disinvesting PSUs in which its stake is already 51%. Non-debt capital receipts can be boosted through monetisation of huge land assets with the defence department, railways and port trusts.

A worrying factor is the relentless increase in interest payments. Chidambaram admitted that bulk of the fiscal deficit is due to interest payments which have gone up significantly due to rising market borrowing and rise in interest rates. Interest